Alamos to acquire Argonaut's Magino Mine making it 3rd largest producer in Canada
Alamos Gold Inc. and Argonaut Gold Inc. announced Wednesday that they have entered into a definitive agreement where Alamos will acquire all of the issued and outstanding shares of Argonaut.
"After considering a broad range of alternatives, we believe this transaction provides a unique opportunity to place Magino in the hands of a well-capitalized and well-run company, who will be able to realize significant synergies given the proximity of the adjacent Island Gold Mine,” said Richard Young, President and CEO of Argonaut Gold.”
“We believe with adequate capital and an optimal expansion at Magino, the mine will deliver significant value to all stakeholders. We are grateful to our team at Magino for their significant contribution and hard work during mine and mill ramp-up. Similarly, we thank our exceptional teams in Mexico and Nevada for their continued hard work throughout the years,".
Alamos will acquire Argonaut's Magino mine, located adjacent to its Island Gold mine in Ontario. The integration of the two operations is expected to create one of the largest and lowest cost gold mines in Canada.
Through the use of shared infrastructure, Alamos expects to unlock significant value with immediate and long-term synergies expected to total approximately US$515 million.
The addition of Magino is expected to increase Alamos' combined gold production to over 600,000 ounces per year, with longer term production potential of over 900,000 ounces per year.
“It will add a third producing mine in Canada to our operations, meaning that 90% of our value is now based in Canada,” said Alamos CEO John McCluskey. “Argonaut's key asset, the Magino Mine, is right next to our Island Gold Mine in northern Ontario. There are tremendous synergies combining these operations that will enable us to unlock.”
The acquisition of the Magino mine will Alamos to realize more than $500 million in operating and capital synergies. The Argonaut and Island Gold deposits sit within 300 meters of each other across a four kilometer strike. Combined, the two deposits contain over 11 and a half million ounces of gold reserves and resources.
“The newly constructed infrastructure at Magino, including the mill and tailings facility is impressive,” said McCluskey. “And I applaud the Argonaut team for what they've built. The Island Gold and Magino Mines will increase our production by over 100,000 ounces of gold per year, bringing the total for this district to over 400,000 ounces per year by 2026. This will become one of the largest and lowest cost gold mining operations in Canada.”
McCluskey says there is excellent potential to build on the exploration success at both the Island Gold and Magino deposits. Jointly he says these mines will create real value and provide tangible benefits to local communities. “We look forward to strengthening our existing partnerships with the indigenous communities and welcoming Argonauts employees to our team. I hope they will thrive with us and look forward to working together in fully realizing the benefits of integrating these two operations.”
“This is an exciting development that fits well with Alamo's gold growth strategy. When you include our young Davidson mine and the Lynn Lake Development Project in Manitoba, our overall Canadian production will double. This will establish Alamos Gold as the third largest gold producer in Canada. My team has a fantastic track record when it comes to creating value through mergers and acquisitions. And I'm committed to making this one a success for all of our stakeholders.”
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